These Startups Are Keeping Austin’s Economy Weird (and Booming)
Considering launching a startup in Austin? There's plenty of incentive to take the entrepreneurial leap in the heart of the Lone Star State.
When Alejandra Rodriguez Boughton exited her corporate investment banking career in Mexico, she planted the seeds of her entrepreneurial dream in America. Her first step: putting down roots in Austin. Quite literally.
“Coming to Austin was a conscious decision,” said Rodriquez, who founded her sustainable produce gardening startup, La Flaca Urban Gardens, in the Texas capital back in 2014. “It’s an entrepreneurial city with a social and environmental conscience that maintains its small town feel.”
Boughton, who earned her M.B.A. at the University of Texas at Austin’s Red McCombs School of Business, is one among a growing influx of early entrepreneurs to set up shop in the city. The recent increase in startups in the vibrant community of more than two million residents comes on the heels of a surge in high-profile companies opening up operations throughout the greater metro region, according to a 2016 report co-authored by the U.S. Chamber of Commerce Foundation and Washington, D.C.-based incubator 1776.
But it wasn’t necessarily the prospect of rubbing elbows (or swapping contacts) with bigger businesses that drew Boughton to Austin. It the was entrepreneurs behind the city’s flourishing startup scene, and the chance to closely collaborate with them, that drove her decision to anchor her nascent enterprise in the heart of Texas.
“People know each other here and go out of their way to support those doing meaningful work,” she said. “I’ve repeatedly experienced a sense of camaraderie among entrepreneurs and the ecosystem that enables our work.”
Austin-based social entrepreneurship incubator UnLtd USA was one of earliest local champions of Boughton’s work — which is transforming underused urban spaces into lush, eco-friendly gardens and micro-farms. Support from Austin Food Investors and the Austin Food & Wine alliance also helped her garden grow.
Boughton also pointed to Edwin Marty of Austin’s Office of Sustainability, characterizing the city’s food systems coordinator as “an ardent supporter” of local farmers. “Not to mention the amazing chefs at restaurants like L’Oca D’Oro, Olamaie, and Dai Due, who consistently support local farmers by transforming our ingredients into edible poetry,” she added.
La Flaca’s specially designed gardens, located in south west, south central, and north Austin, supply the above-listed restaurants and several others, along with caterers and food artisans, with hard-to-source specialty herbs and heirloom vegetables.
“There’s plenty of land within our city that’s suitable for farming,” Boughton said. “It just takes a little imagination and some hard work to transform a large backyard or school lawn into an edible oasis.”
It often also takes plenty of guidance and connections — and a critical capital infusion — all of which she received from UnLtd USA. The 12-month, cohort-based program networks at the city level to find, fund, and support local startups tackling social, environmental, and civic problems in innovative ways.
To innovatively maintain sustainable farming practices, La Flaca uses high-tech, smartphone-connected temperature and humidity sensors that gauge growing conditions across its grow racks and fields, and inside its greenhouse.
“If temperature or humidity move outside of a predetermined ideal range, I get an alert on my phone so I can deal with it immediately,” said Boughton. Looking ahead, she plans to render her operations yet more sustainable by automating plant watering through the use of similar smartphone-connected sensors.
Compost Pedallers is another innovative sustainable startup incubated out of UnLtd USA. Former door-to-door compost salesman Dustin Fedako co-founded the Austin-based company in 2012 with Austin Board of Adjustments member Eric Goff. Their mission: “to build a more vibrant Austin community by reducing waste, strengthening our local food system, and reconnecting neighbors to each other and the places that they live through more sustainable practices — all without burning a single drop of fossil fuel.”
The idea for Compost Pedallers, a 100 percent bike-powered compost collection and recycling service, fittingly came to Fedako as he biked home from volunteering at Urban Roots, an east Austin nonprofit that improves the lives of local youths through food farming.
He thought, “Sure, no one wants to make trash, yet the average American makes almost five pounds of it every single day … And the kicker? Nearly a third of the stuff we throw away each day could be composted. I realized that this massive lack of action is due to a massive lack of options.”
That’s when the gears of change in Fedako’s mind “started to whirl,” as he puts it. He decided to launch Compost Pedallers to “connect the dots” between the people and businesses in Austin producing organic waste and those who could use those scraps to grow more food. Together with Goff, he successfully “flipped the script on waste,” turning a common problem into an opportunity to grow a greener city.
Beginning with just 45 customers, the startup made its maiden compost collection voyage in December of 2012. Today, Compost Pedallers’ fleet of electric-powered cargo bikes shuttle food scraps and more from some 700 homes and companies each week to a network of local gardens. From there, the compostable odds and ends — which typically include eggshells, coffee grounds, vegetable peels, and grass clippings — are processed into natural fertilizer.
Thanks to the Internet of Things, Compost Pedallers members, who pay less than $20 per month for the service, can track their environmental impact in real-time online. They’re also able to share it with their friends via social media. For every pound of waste collected, members earn reward points toward freebies, such as free coffee, yoga classes, and event tickets, all sourced from a dozen nearby businesses.
Like Boughton, Fedako and Goff chose to base their venture out of Austin not only to connect with the startup-friendly business community but also to tap into key civic resources and support.
“We chose to launch in Austin because of the confluence of the city’s progressive population, bike-friendly infrastructure, cooperative local government, and a bustling local food scene that really create a Goldilocks environment for our business model,” Fedako said.
“Also, we’ve found the startup environment here to be ridiculously friendly, where other entrepreneurs are quick to share resources and make introductions, and investors and seasoned business people want to see you succeed. They’re eager to take you under their wing.”
While Fedako is quick to sing the praises of Austin’s open and neighborly startup ecosystem, he also acknowledges that, like all works in progress, it still has room for improvement. For example, he’d like to see more pitching and funding opportunities for beginning entrepreneurs, particularly in the social impact space, like the City of Austin’s recent [Re]Verse competition.
“If we want to continue to attract the talent, diversity, and culture necessary to keep growing Austin as a startup capital,” he added, “we need to focus on improving infrastructure, expanding rideshare and public transit, and supporting affording housing options in Austin’s urban core.”
Boughton also listed a lack of affordable housing as a mounting concern for the city’s new crop of entrepreneurs. “The cost of living is rising quickly,” she said. “For most early stage entrepreneurs, affordability plays a big role in your ability to survive. As an urban farmer, finding access to affordable land within the city that is suitable for farming is an increasing challenge.”
Austin’s climbing cost of living isn’t enough to send Boughton or Fedako packing, however. As long as people produce waste in the city, and as long as people there seek to eat farm-fresh foods, Fedako predicts that their businesses will thrive, not unlike gardens carefully fertilized with compost.
“We need to stop looking at waste as a problem, and start treating it like an opportunity,” he said. “Airbnb did it with vacation homes. Uber did it with cars. If I could say one thing to all the entrepreneurs out there, it would be to be on the lookout for waste. That’s where your opportunity lies.”